The Depot and Petroleum Marketers Association of Nigeria (DAPMAN) said the rise in the landing cost of petroleum products has renewed the calls for full deregulation of the downstream subsector of the nation’s oil and gas industry.
Its Executive Secretary, Mr Olufemi Adewole said in Lagos that deregulation of the downstream remain best option as the ongoing subsidy by the Nigerian National Petroleum Corporation (NNPC) is not sustainably.
Adewole said that as private marketers continue to stay on the sidelines in terms of petroleum products importation, depot owners have reiterated the need for the Federal Government to fully deregulate the fuel market.
He said that NNPC has been the sole importer of petrol into the country for two years as private oil marketers stopped importation due to shortage of foreign exchange and increase in crude oil prices, which made the landing cost of the product higher than the official pump price of N145 per litre.
According to him, if fully deregulated, it would also help government to use the subsidy money to develop other sectors. Other countries sell petrol higher that Nigeria pump price.
The DAPPMA scribe, however, lamented NNPC’s decision to sell Premium Motor Spirit (PMS) to them at N117 per litre, admitting that the price is not only outrageous, but not cost effective.
He added that the N111 per litre price, which NNPC was selling fuel to them, was at an insignificant margin, wondering what will happen when the state-run oil firm has increased the price to N117.
Adewole said NNPC’s monopoly of fuel importation has compounded their woes.
He said: ‘’By the time depot owners, who are mostly marketers, add other costs incurred in the course of buying fuel from NNPC and later sell the product at the pump price of N145 per litre to consumers, they will be left with little or no profits.
“ More worrisome is the fact that NNPC controls fuel importation, a development which has compelled marketers to sell the product at a particular price. That is the situation we find ourselves.
“We are praying for solutions to problems inhibiting the growth of the industry, especially the downstream sub-sector,’’ NAN quoted Adewole said.
He said, NNPC sells fuel only to depot owners, who have Profoma Invoice, a development, which implies that any depot owner or marketer, who do not have Profoma Invoice would not be able to buy fuel.
He said diesel price is deregulated, stressing that marketers are selling the product at between N220 to N230 per litre.
“No depot owner or marketer, he said, can say he or she is making profit under the new price regime.
“More worrisome is the fact that NNPC controls fuel importation, a development which has compelled marketers to sell the product at a particular price. that is the situation we find ourselves,”he said.
Adewole, admitted the fears expressed by depot-owners over the new price regime. according to him, the fears stem from the fact depot owners make very little profit because of the current price system.
